 And I think this next conversation is another one that I really invited to the stage this year because beyond banking, ESG investing in public markets is the next layer that everyone touches through retirement accounts, through mutual funds, and the growth of this industry has been really impressive. But I think sometimes within the hardcore impact communities, people don't see the potential for impact as high in the public markets because it's not direct impact because it's hard to influence those organizations. But the folks we're going to welcome to the stage speak for some of the largest financial institutions and have an insight into the ways that the ESG conversation is really evolving and I think you'll find our conversation really interesting. So please welcome Mark Newberg, our moderator, Jackie Vanderbrug, and Andrew Lee. All right. Hey, everybody. I'm Mark Newberg. That's Andrew Lee and that's Jackie Vanderbrug. There was a point, I mean, we're all friends. There was a point where I could do their titles just from memory, but the titles have evolved. So Andrew is the head of sustainable and impact investing in the chief investment office of UBS wealth management. There are several words in the English language that are not in that title. And the inimitable Jackie Vanderbrug is the head of sustainable and impact investment strategy for Bank of America. And I realized, Andrew, I didn't come up with an adjective for you. Do you want to add one? I'm sure you can come up with one. Maybe end of the session, Mark. All right. So we're talking about ESG or environmental, social, and governance factors, which you can think about that. And then I'm going to ask Jackie and Andrew to fix my definition because they work with this on a daily basis, things that are tied to the operational side of the business. And we tend to think about ESG as the public market's side of impact investing. And as I said backstage before we were coming out, we have about 25 minutes to get through $20 trillion in assets. So I don't know that we're going to cover it all, but it is a huge asset pool that if we want impact to scale and we ultimately want to combine doing good and doing well, we have to incorporate into our portfolio strategies. So Jackie, let me turn to you first. Let's start with what did I screw up in the definition of ESG? Well, I think, you did it well, but it bears repeating. I regularly have people come back to me and say, what's that ESQ stuff that you keep talking about? And so it's important to have people actually think through these what we have traditionally called non-financial factors, right? That these factors are increasingly understood as material to note the conversations beforehand, long-term performance, right? And so some of them being in that environmental aspect of things, some of them being more social, some of them being more governance, but all of them being another look. The analogy that ends up working best with our clients is that of doctors in the next ray. So I say to our clients, look, when doctors got the X-ray, they didn't stop looking at people's skin or their eyes or their ears. They kept doing all of that. They just had additional information. So to me, ESG is that additional information about the DNA of a company that we use in addition to financial factors. And so Andrew, how do you look at it? Because we've seen a dramatic increase in client demand for ESG, and it informs how products are built and created. But what's the sort of where does ESG come in as an evaluated factor when you're thinking about putting something on the platform? Look, I think Jack is exactly right. When we think of ESG, I mean, our broad umbrella is sustainable investing, right? So ESG is just identifying the three factors that are additive to a typical investment process, right? So, you know, when we say ESG investing, to me, that doesn't necessarily mean anything, right? You can have mainstream strategies. Can we stop saying ESG investing? Please, let's do it. Jack, are you about to coin a term? Pardon me? Are you going to coin a term? No, I'm not going to coin a term. That's one I don't love. So I think it's about stepping back from all the terms and the definitions and everything that confuses people and just saying, look, what are our intentions as investors or what are our client intentions as investors and what are the solution sets that are out there and how do they actually deliver against that? And that could be mainstream strategies that are delivering S&P 500 or MSCI World-type exposure, but where the portfolio manager has fully integrated ES and G factors or any one of those where material. It could be exclusions where you have to recognize that there could be a performance impact, but you are aligning with your value set. And it could be impact. Warren was up here talking just now about private equity impact types of opportunities. And that's different, and you have ESG factors incorporated into portfolio companies, but you also have it incorporated into the strategy in terms of what are we trying to achieve with regard to sustainable outcomes. And that's where I think that's the far end of the spectrum, as we call it, with regard to baking it into the strategy. It's not just a piece of the process. So I almost split it into two things. There's the process element of it, and then there's the strategy element of it. And I think the people who are really interested in sustainable investing and things that are beyond just exclusions think about that strategy piece and saying, why is something in my portfolio? Which is perfect, because one of the things we talked about before settling on the design of this conversation was getting to the why behind these strategies. As often we get up here and talk about what's being done. We don't get to the sort of why and how. So let's start with this, and Jackie. Why has ESG and why has sustainability become such a topic of conversation and I'd say asset movement in the last couple years? I mean, why now? So I think one piece of it is, there's three pieces, right? So one piece is client demand, right? So when you have eight of 10 of our clients saying that they believe companies should be responsible for their actions, and five of 10 saying that they think that ESG factors should be used in investment, you're in large numbers in terms of client demand and we know demographics are only gonna drive that further. The second is the economy's changing, right? So the way that the growth in intangible assets, the fact that now brand and intellectual property and things that are much harder to measure with traditional financial factors are dominating the global economy, that's a huge piece. And then the third you can't forget is just the availability of data and the availability of portfolio construction tools. So part of this was that the sophistication of the development of both strategies and the use of those strategies and portfolios wasn't there. So put those three things together and yeah, we're talking about this. So Andrew, you're a global investment organization. Why now? Yeah, look, I wouldn't argue with anything that Jackie said. I think it's the recognition that increasingly in order to look at the full picture of a company and think about long-term fundamental value in returns, you have to look at these non-financial factors, right? Jackie was alluding to the fact that tangibles versus intangibles as a percentage of whatever index you take has completely flipped over the last three decades, right? Eight, three decades ago it was 85% tangibles and a lot of machinery, equipment, hard assets and it's completely flipped where it's 15% tangibles and 85% intangibles. So as a portfolio manager and investment analyst, if you're not looking at these things and incorporating them, wear material of course, you're not getting the fullest picture of any given company. So you're starting to see that recognition from an investment perspective. We certainly believe it out of the Chief Investment Office and all of the fund managers that we work with think are increasingly recognizing it to a different degree but you're seeing interesting products come on board and now I would almost say there's a proliferation of products where we have to sort through them and say what actually belongs in a sustainable investing portfolio that actually achieves sustainable investing objectives or impact objectives and what is more like a marketing strategy that's cloaked on top of. All right, so this is a really interesting thing. How do you make that determination? Because these are conversations that these have been going on for decades, right? What's real, what's not? Jackie, I saw you nodding when Andrew was talking about making that determination. How do you make that determination? So Andrew and I were talking about this earlier today. There's not a magic wand here, right? So on the great side of this, if the piece that I forgot, Mark, and my three things of like why now? Part of the reason why now is that the research is now showing that it works, right? The increasingly when our lead equity analyst, quant analyst is saying that ESG is the best predictor of future earnings volatility she's seen in 20 years of being an equity analyst and she's writing about that, our advisors listen, like they think I'm interesting, they think Savita is the queen, right? Like in an amazing way, right? So pause on that. So there's now quant research saying this matters. It's not just it matters in terms of meaning, which is really important to all of us and everybody watching, but it also matters in a financially material way and it's the merger of the two of them. Right, and it's also, I mean the research has gone just beyond the, yes, it can be a signal of volatility, but we've looked at that compared to traditional factors and said it's the least correlated factor, so it's additional whether you wanna say to momentum or to growth or to some other factors that have worked. So from that standpoint, traditional investors are saying, okay, this is useful. But then Andrew and I have to say, well, but all of these investors aren't using this in the same way and if we're actually trying to have truth and advertising to our clients, we need to say this is a strategy that has used ESG factors to reduce volatility by taking out bottom performers and this is a strategy that is integrating ESG but it's willing to invest in anything and this is a strategy that's really using ESG and other outcome data to find those transformative businesses that are solving the world's problems and those are gonna be differently useful to different clients and different portfolios but there isn't a little sticker or a quantitative way, right? It's a qualitative assessment plus some quantitative tools. Totally agree with that. I think it's about truth and advertising. You get back to what are we trying to achieve? What are the different types of outcomes you're trying to achieve and can you properly label against that? Can you properly assess a strategy against that? So in our view, it's kind of two things. You go back to process and strategy, right? And there's a process that we have to assess the ESG-ness, if you will, and how ESG factors are incorporated. I don't think that's gonna be the new tag line. No, it's not, but ESG factors and incorporating those into an investment process. How serious are you? How rigorous are you? How much have you built in terms of resources and capabilities around that? That's about your process and that can apply to a mainstream strategy. That can apply to a deliberate sustainable investing strategy and then there's the strategy part of it which is what is your strategy trying to achieve and being explicit about that? And so for us, the approach that we've taken is really to build a portfolio and say, look, we'd like you to have different line items in your portfolio across equities and fixed income in the liquid space and what do each of those exposures provide to you so that upfront you have an expectation and then your portfolio either matches up to that or it doesn't in terms of the solution set that's in there. So let's talk about the really interesting stuff which I think is building strategies because we weren't having this conversation on stage 10 years ago. We weren't having it five years ago. This is now, five years ago, we were talking about impact getting to the mainstream. Now we are talking about the mainstream. Jackie, you've been at the forefront of gender lens investing for more than a decade. Where does gender lens as a strategy fit into this conversation and how, I'm asking two questions at once, how does building a strategy for this new public markets sector of impact work in real life? Those are two really big questions for the end of the day before Drinks Mark. You didn't sign up for the panel because you thought it was gonna be easy. No, no. And they bookended my day. So here's the thing. I think that what a gender lens has done is pushed us as investors to continue to iterate towards more rigor and better investments. So the research, similar to more generic research in ES and G, there's been more and more research showing that companies that are more diverse from a gender standpoint are better long-term investments, less volatile and a whole set of other factors. Similarly, at the same time, we've had this understanding that gender equality is essential to the other things that impact investors are trying to get. So we're not gonna get the rest of the SDGs accomplished without SDG-5 integrating in. And I appreciate that the Bain aspect of all of them are interrelated. That's I think what impact investors see very whole. But historically, I think people had seen gender equality as a vertical as opposed to seeing it as a horizontal. And some of the challenges, especially US-based challenges of the last year and a half have maybe shown us a little bit more in terms of the risks that we have when we don't use a gender lens, when we haven't thought about toxic cultures, when we haven't thought about our implicit biases and other kinds of things. So I mean, just to come back to your question, what role does gender equality play? It forces additional rigor and you can then say, okay, what was the gender lens, but now what's the racial and diversity lens that's forcing more rigor? What's the environmental lens that's forcing more rigor? And so the process that we've used in gender lens has now been replicated in a number of other ways that I think it's been helpful. And then the other piece is it's bringing in more investors. So we are now realizing that disproportionately women have said, wait a second, this is interesting to me. I wanna pay it forward. I wanna understand the role of my investments in creating gender equality. And we know, again, it's not just gender lens investing is not just for women, but women have the largest aspirational gap, right? Women have the largest gap between what they say they wanna do in impact and what they're actually doing. And so if we don't start offering some products that provide them different ways in making that happen, it's our loss. All right, so Andrew, let's talk about products. What's the, how does a product go from an idea to on your platform? We laugh. Because there is no magic wand and you don't have your fingers and it doesn't happen in two months. There's no magic wand. And we're not creating all the product out there. There are great fund houses that have done a lot to create strategies on their own, whether it's in gender or other thematics or with engagement focus and so forth. So part of it is the process of coming onto our platform and whether we think about how they match up against this sustainable investing framework. Again, achieving the certain outcomes that an investor is looking to do. You know, when we think about co-creation, which is something we have been thinking about for a while, we wanna achieve a specific objective. So right, gender lens is a good example. Another example is engagement in public markets. So I think what's exciting is the ability to really use engagement to drive impact in public markets. And I think this is the debate that's been going on for a while. Private markets is a little bit clearer. You have control in many cases. You're adding capital to situations that might not otherwise have it. So you can talk about all the traditional things we talk about, intent, right? Measurement, additionality. But it's harder to do in public markets. And I think that one of the exciting places that people have done for a long time but where you're starting to see a lot more focus, whether it's around the SDGs or specific themes, is products that really focus on driving that additional engagement, quantifying it over time and committing to hold investments for longer periods of time so that you can actually say, look, I've owned this in a portfolio over time and here's what the incremental impact is as opposed to reporting on the underlying metrics that a company says they're doing and then in a week or two weeks or four months or whatever it is saying it's not in the portfolio anymore. So how can you credibly track impact over time if that's your portfolio? So I think that's one of the issues in public markets and yet it's one of the opportunities if you have these dedicated engagement strategies to really drive incremental impact but you have to be measuring it and you have to have a committed portfolio that says this is what the purpose, right back to that strategy question, this is why we've created this portfolio and we're gonna measure it and report on it for you. And so what do you both wanna see from, let's take this to the company level because companies go into funds and we're talking about ESG being an operational framework that's now being applied at the company level. There's been pressure from analysts to companies to do this. What do you wanna see from a company? Does it depend on the sector of the company's in or are there a set of things you wanna know about like wages, healthcare, environmental efficiency, what is it, energy efficiency? Or is it you know it when you see it and it's different by industry? Or did Mark just ask a really stupid question? No, no, no, the answer I think is twofold, right? So part of it is your piece, it does differ by industry, right? So it is that aspect of you know you're much more interested in the performance of water recycling for utility than you are for a financial services company. I think that in general we're much more interested in performance data than in policy data, right? So historically ESG was much more about do you have a XYZ policy? And increasingly it's kind of goals do you have and how far are you, you know, what kind of process can you show towards those goals? That's harder to actual do apples to apples for it, you know, so that's where the art of being a portfolio manager comes in. What do you think? No, I agree with that. I think that what I'd point out is it has to come from the right place, right? In terms of you're not reporting metrics simply to report metrics. So when you go to investor day what are people asking you? And we'll report on that, that's fine. I think it has to come from an understanding of what's material to your business model and what's actually important that you want to achieve whether it's through CSR or whether it's through your actual operations. And so I think that's what should drive increased focus on ESG at the corporate level together with an understanding that that's what's important to investors increasingly as a piece of the investment process. But Mark, just to, because this goes back to the very beginning setup, you know, that the community here has historically been less interested in the impact in public markets. And I'll say, you know, my background coming from being part of, you know, starting the good capital fund and being in private markets. I was the same way. I was less interested in public markets. Living inside a large public company now I do see the systemic nature, right? So the role of ESG to our investor relations team has transformed in the last three years. You know, our head of ESG is linked at the hip to our IR head, right? They go regularly together. That was not happening five years ago. And when there's a new ETF launch there's an immediate question of are we in it or are we not? And if not, what would we have to do to get there? So I think it's really hard to measure the, you know, specific impact of some of this but the systemic impact is really clear. And has the demand increased because stakeholders are saying we want this? Is it because the research data shows reductions in risk and volatility or is it a combination of everything and the financial community and the investor community sort of coming together and saying we got to use the public markets to drive some of the impact we want to see? I think it's a combination. I think it's an understanding on investor's parts that they do care about. They have preferences. And I think in the past people had said, well, I don't think that's germane to investing for return. And now increasingly you're seeing that there are opportunities to invest for return and also do something. Whether it's aligning, you know, to values whether it's actually integrating ESG factors into your investing or, you know, creating more deliberate impact, I think there is that realization. So it's a confluence I think of people are genuinely interested in how their capital is impacting broader people and planet and how can they put that into their portfolios. And I think, again, it comes back to a recognition of what can you do and what can't you do in public markets. And I think as long as we're realistic about those expectations going in, then I think we're fine, you know, a year down the road or five years down the road. And that's a good segue to the last question because we're almost out of time. What do you want to see in the future? We talked about what you want to see from a company. We talked about what you want to see from a fund. What do you want to see in the future? If we're back here five years from now having this conversation, what will feel like success? You wanted a philosophical question. You like philosophical questions. So I guess three things. We haven't talked about advisors at all today, but the top three things that get investors in our research to move are performance, proof of impact, and if their advisor talks about it. And so, you know, what I want to see five years from now is that this is a much more natural muscle for our advisors. That they're able to, you know, integrate this into their practice in a way that enables them to build stronger relationships, you know, but also to have more impact on the world. The other thing is we've got to figure out how to have flexible products that are more useful in multi-asset class portfolios. So a lot of our products right now are a little esoteric. Andrew? Yeah, I think I've got 10 seconds. So I would say, agree with everything you said about advisor adoption and advisor interest, greater client interest, and adoption, which ultimately means more capital into the space. And the last piece of it is a real focus on measuring the impact and trying to credibly report on it so that five years from now we actually do understand what was accomplished and what wasn't accomplished both in public markets and in private markets. And I will say I would love for corporate executives and fund managers and board members to have a clear picture of the difference between operational and aspirational and drive it getting ESG to the operational parts that help make the business a better, more successful, more sustainable business. And that's it. Thank you. Thanks.